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A_Dobrynin_Lanscape_&_Evolution_of_PE_market

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A_Dobrynin_Lanscape_&_Evolution_of_PE_market

  1. 1. N ew R ussia G rowth Private Equity Advisors Landscape and Evolution of Private Equity in Russia Andrey Dobrynin Managing Partner June 2010
  2. 2. Presentation roadmap <ul><li>Russian economy: is the crisis over? </li></ul><ul><li>PE landscape: fundraising, deals and exits </li></ul><ul><li>Investment ideas </li></ul><ul><li>How will Russian PE industry evolve in the next few years? </li></ul>
  3. 3. Russian macro picture Source: RTS Source: State Statistics Committee Source: State Statistics Committee Source: Central Bank of Russia
  4. 4. PE landscape <ul><li>Before the crisis: 18 Professional GPs (with assets of more than $150m) with total AUM $6bn </li></ul><ul><li>Fundraising in 2009-2010: </li></ul><ul><ul><li>Almost no new institutional money </li></ul></ul><ul><ul><li>Few funds with private LPs </li></ul></ul><ul><li>Recent deals </li></ul><ul><ul><li>Financing and buyout of portfolio companies </li></ul></ul><ul><ul><li>Venture capital deals </li></ul></ul><ul><ul><li>Few large deals </li></ul></ul><ul><li>Exits </li></ul><ul><ul><li>Only few completed exits </li></ul></ul>
  5. 5. What is NRG <ul><li>Independent alternative investment manager </li></ul><ul><li>Volga River One: size - $177m, first closing - 2006; number of LPs – 20 </li></ul><ul><li>6 investments: telecoms, retail, food production </li></ul><ul><li>Volga River Growth – fundraising $250m </li></ul><ul><li>Target 1st closing: Q3 2010 </li></ul><ul><li>EBRD expected to be a core investor </li></ul><ul><li>2 club deals closed </li></ul>
  6. 6. What happened to PE investments? % of bad loans to total portfolio of Russian banks Broad-band Internet subscribers, m Source: NRG estimates Source: State Statistics Committee Source: PWC, NRG estimates Source: State Statistics Committee
  7. 7. NRG Private Equity Portfolio: Case study Ufanet: sales & EBITDA, $ m (internet provider) Genser: sales & EBITDA, $ m (car dealer) Source: company data Source: company data Source: company data Source: company data Begemot: sales & EBITDA, $ m (toy retail chain) Umnitsa: sales & EBITDA, $ m (baby food)
  8. 8. Russian PE industry outlook <ul><li>Economy is growing again </li></ul><ul><li>Return to classic “growth capital” model </li></ul><ul><li>Limited availability of debt creates opportunity for hybrid equity </li></ul><ul><li>Poor track record will create difficulties in fundraising for many GPs </li></ul><ul><li>Low deal competition </li></ul><ul><li>Attractive valuations and high IRRs </li></ul>

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